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Dollar index rises to near one-week highs amid US-Iran tensions
The US Dollar Index was around 101.18, with economists in a Reuters poll expecting the Fed to keep its benchmark rate at 3.5% to 3.75% on July 28 to 29.
The US Dollar Index, which tracks the greenback against a basket of six major currencies, extended its advance Tuesday as renewed US-Iran tensions fueled demand for safe-haven assets. FXStreet said the DXY was trading around 101.18, near one-week highs, as hopes for a diplomatic breakthrough faded.
According to FXStreet, President Donald Trump reiterated a hard-line stance at a White House press conference, saying he had no interest in talks until Tehran was ready and warning the US would target any sites linked to Iran’s nuclear program. The report also cited continued military activity, including a tenth consecutive night of strikes by the US on Monday and attacks by Tehran on US military assets in the region.
FXStreet linked the dollar move to renewed oil price strength, which it said is rekindling inflation concerns and supporting expectations that the Federal Reserve will keep a tighter policy stance. A Reuters poll released Tuesday showed all 104 economists expect the Fed to hold its benchmark rate at 3.50% to 3.75% at the July 28 to 29 meeting, while 78 forecast no change through year-end, and 44 of 67 respondents said the risk of a rate hike is high.
Latest closeDollar index 100.71 ▲0.2%